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DECISION No.321/1998/QD-BTM OF MARCH 14, 1998 ISSUING THE DETAILED REGULATION ON THE IMPLEMENTATION OF PROVISIONS OF DECREE No.12-CP OF FEBRUARY 18, 1997 AND DECREE No.10/1998/ND-CP OF JANUARY 23, 1998 OF THE GOVERNMENT CONCERNING THE EXPORT, IMPORT AND/OR SALE OF PRODUCTS IN VIETNAM AND PROCESSING ACTIVITIES BY FOREIGN-INVESTED ENTERPRISES AND PARTIES TO BUSINESS COOPERATION CONTRACTS

THE MINISTER OF TRADE

Pursuant to Decree No.95-CP of December 4, 1993 of the Government on the functions, tasks, powers and organizational structure of the Ministry of Trade;

Pursuant to the Law on Foreign Investment in Vietnam of November 12, 1996;

Pursuant to Decree No.12-CP of February 18, 1997 of the Government detailing the implementation of the Law on Foreign Investment in Vietnam;

Pursuant to Decree No.10/1998/ND-CP of January 23, 1998 on a number of measures to promote and guarantee foreign direct investment activities in Vietnam,

DECIDES:

Article 1.- To issue together with this Decision:

The detailed Regulation on the implementation of provisions of Decree No.12-CP of February 18, 1997 and Decree No.10/1998/ND-CP of January 23, 1998 of the Government concerning the export, import and/or sale of products in Vietnam and processing activities of foreign-invested enterprises and parties to business cooperation contracts.

Article 2.- The functional bodies of the Ministry of Trade, the agencies authorized by the Ministry of Trade, the foreign-invested enterprises and the parties to business cooperation contracts shall have to implement this Decision.

Article 3.- The Regulation issued together with this Decision replaces Circular No.03/TM-DT of July 2, 1993 of the Ministry of Trade.

Article 4.- This Decision takes effect 10 days after its signing.

For the Minister of Trade

Vice Minister

MAI VAN DAU

THE DETAILED REGULATION ON THE IMPLEMENTATION OF PROVISIONS OF DECREE No.12-CP OF FEBRUARY 18, 1997 AND DECREE No.10/1998/ND-CP OF JANUARY 23, 1998 OF THE GOVERNMENT CONCERNING THE EXPORT, IMPORT AND/OR SALE OF PRODUCTS IN VIETNAM AND PROCESSING ACTIVITIES BY FOREIGN-INVESTED ENTERP-RISES AND PARTIES TO BUSINESS COOPERATION CONTRACTS

(Issued together with Decision No.321/1998/QD-BTM of March 14, 1998 of the Minister of Trade)

Article 1.- Scope and objects of application:

1.1- This Regulation specifies the contents and procedures for the import of materials and supplies for capital construction to create fixed assets, the import of raw materials in service of production, the export of products manufactured by enterprises, the export of products not manufactured by enterprises, the sale of products in Vietnam and the goods processing by foreign-invested enterprises and parties to business cooperation contracts (hereafter referred to as the enterprises).

1.2- The enterprises shall base themselves on this Regulation to draw up their plans for import, export and/or sale of their products in Vietnam according to their production and business requirements then submit them to the Ministry of Trade or agencies authorized by the Ministry of Trade for examination and approval; and to register the performance of processing contracts.

1.3- The functional bodies of the Ministry of Trade and the agencies authorized by the Ministry of Trade shall base themselves on the provisions of this Regulation to approve the plans for export, import and/or sale of products in Vietnam and register processing contracts in time for enterprises.

1.4- The export and import plans already approved by the Ministry of Trade or the agencies authorized by the Ministry of Trade and the processing contracts already registered by the Ministry of Trade or the agencies authorized by the Ministry of Trade shall serve as basis for the enterprises to fill procedures at the customs offices.

Article 2.- The time limit for approving plans for export, import and/or sale of products in Vietnam and processing activities of enterprises

2.1- For the Ministry of Trade: Within 10 days from the date of receiving a complete and proper dossier, the Ministry of Trade shall issue a written approval of the enterprise's plan for import, export and/or sale of products in Vietnam (the dossier-receiving date shall be the one indicated by the document-receiving seal of the Ministry of Trade).

2.2- For the agencies authorized by the Ministry of Trade: The agencies authorized by the Ministry of Trade shall base themselves on this Regulation to examine and promptly approve the enterprises' plans for import, export and/or sale of products in Vietnam, which come under their assigned management competence, within 15 days as stipulated by Decree No.12-CP of February 18, 1997 (the dossier-receiving date shall be the one indicated by the document-receiving seal of such agencies).

2.3- For incomplete or improper dossiers: Within 3 working days from the date of receiving such dossiers, the Ministry of Trade or the agency(ies) authorized by the Ministry of Trade shall notify directly or in writing the concerned enterprises thereof so that the latter may make supplements or adjustments thereto. The date of officially receiving a complete and proper dossier shall be the one indicated by the official dispatch-receiving seal of the Ministry of Trade or the agency(ies) authorized by the Ministry of Trade on the latest document.

2.4- The time limit for registering processing contracts of enterprises:

Within three working days from the date of receiving the complete and proper dossiers, the Ministry of Trade or the agency(ies) authorized by the Ministry of Trade shall register the processing contracts for enterprises.

2.5- The required dossiers to be sent to the Ministry of Trade or the agency(ies) authorized by the Ministry of Trade are defined in the relevant Articles hereafter.

Article 3.- Regarding the plans for import of materials and supplies for capital construction to create fixed assets

3.1- Based on its investment license (hereafter referred to as IL for short), techno-economic report and technical design (in cases where there are changes in the techno-economic report), an enterprise shall draw up its plan for the import of machinery, equipment, supplies, facilities, construction materials, transport means for the construction of projects to create fixed assets.

Such import plan may be either drawn up for the whole project or divided into phases in conformity with the project construction schedule.

The enterprise may propose the Ministry of Trade or the agency(ies) authorized by the Ministry of Trade to supplement and readjust the above-said import plan.

3.2- If the plan for the import of machinery, equipment, construction materials and transport means fails to conform with the investment license and techno-economic report, a certification by the investment license granting agency is required, in the following cases:

3.2.1- Non-conformity in import value:

+ The import value of each item of construction materials, machinery or equipment exceeds by 10 %, for items with allocated import capital of up to 5,000,000 USD.

+ The import value of each item of construction materials, machinery or equipment exceeds by 500,000 USD, for items with allocated import capital of more than 5,000,000 USD.

3.2.2- The techno-economic report does not specify the capital proportion allocated to each item of machinery, equipment, construction materials, transport means, office equipment,... that need to be imported.

3.2.3- The techno-economic report does not contain a specific list of machinery, equipment, construction materials, supplies, transport means or a list of changed machinery, equipment, construction materials, supplies, transport means that lead to changes in the production objectives, production and business capabilities and in the technological processes or cause environmental impacts.

3.2.4- The import of used machinery, equipment, supplies... is not in conformity with the investment license.

(The time limit for approving plans for the import of machinery, equipment and construction materials for the formation of enterprises is provided for in Article 2)

3.3- A dossier to be sent to the Ministry of Trade or agency(ies) authorized by the Ministry of Trade shall include:

3.3.1- An official dispatch requesting the import thereof, which is enclosed with:

+ A brief report on the enterprise.

(Such a report shall be sent only once after the enterprise is established)

+ A list of machinery, equipment, supplies, facilities, construction materials, transport means, ... to be imported to create fixed assets.

The official dispatch must clearly state the expected duration for the completion of capital construction (the time according to the techno-economic report and the time expected through reality by the enterprise).

3.3.2- The investment license or business license in case of a business cooperation contract (a copy)

3.3.3- A techno-economic report

3.3.4- A technical design (in cases of any changes in the techno-economic report)

3.3.5- The business cooperation contract (in case of a business cooperation contract).

Article 4.- Regarding the additional import of equipment, machinery, construction materials, supplies, facilities, transport means, etc., for the expansion of production and/or intensive investment:

4.1- The import of machinery, equipment, construction materials, supplies, facilities, transport means,... for the expansion of production and/or intensive investment within the investment capital shall be settled on the basis of the investment licenses adjusted for the increase of investment capital.

4.2- The time limit for approving plans for additional import of machinery, equipment and/or construction materials for the expansion of production is provided for in Article 2.

4.3- A dossier to be sent to the Ministry of Trade and the agency(ies) authorized by the Ministry of Trade shall include:

- An official dispatch requesting the import thereof.

- The enterprise's techno-economic report on capital increase already submitted to the investment license-granting agency for adjustment and the adjusted investment license.

- A list of equipment, machinery, construction materials, supplies, facilities, transport means,... to be imported. Such a list must be compatible with the allocated capital for import and the list specified in the above-said report for capital increase.

Article 5.- Regarding the plans for import of raw materials, materials and supplies for production

Basing themselves on their investment licenses, techno-economic reports and the performance of the previous year's export and import plans, the enterprises shall draw up plans for the import of raw materials and materials for production, then send them to the Ministry of Trade or the agencies authorized by the Ministry of Trade for consideration and approval.

The plans for import of raw materials and materials may be adjusted and supplemented.

The time limit for approving plans for import of raw materials, materials and supplies for production is provided for in Article 2.

Article 6.- Regarding the plans for export and/or sale of products manufactured by the enterprises as prescribed in the investment licenses:

The enterprises shall base themselves on their investment licenses and annual actual production capacity to draw up plans for export and/or sale in Vietnam of their products.

The enterprises shall be entitled to directly export or entrust others to export their products.

In cases where an enterprise fails to fulfill the export quota stipulated in its investment license due to difficulties in seeking export markets, it shall have to report to the Ministry of Trade for readjustment of its annual plan for export and/or sale of products in Vietnam.

If an enterprise has fails to fulfill the export quota stipulated in its investment license for three consecutive years, it shall request the investment license-granting agency to consider and readjust such export quota and the preferences prescribed in the investment license or withdraw its investment license.

Article 7.- Regarding the export of products not manufactured by enterprises under their investment licenses:

7.1- The enterprises shall be entitled to purchase, directly or through domestic enterprises, goods items which are not manufactured by them as stipulated in their investment licenses for export processing or for export, except for items listed in Appendix I attached herewith. Particularly for fine-art items made of wood, certificates of origin of raw material wood are required under the regulations of the Ministry of Agriculture and Rural Development.

Such list shall be readjusted and announced together with the Government's annual decisions on the export and import management.

7.2- The plans for export of products not manufactured by the enterprises shall be registered at the Ministry of Trade or the agency(ies) authorized by the Ministry of Trade.

The time limit for approving the export plans of enterprises is provided for in Article 2.

7.3- The foreign-invested enterprises may entrust the export of products manufactured by them or undertake the entrusted export of products not manufactured by them as mentioned in this Article.

7.4- The above-said export and entrusted export shall be effected only when the enterprises complete their capital construction and commence their production.

The export and entrusted export activities shall be conducted in accordance with the current regulations on export and import management.

Article 8.- Tax regimes applicable to the enterprises importing raw materials for manufacture of products to be sold to other enterprises as materials for direct manufacture of finished products for export

8.1- Enterprises shall be entitled to sell products they have manufactured to other enterprises for use as materials for manufacture of export goods and shall be exempt from import tax for the corresponding amount of raw materials.

The sale and purchase shall be effected through economic contracts in accordance with the current legal documents.

The exemption of import tax for raw materials shall be given only after the last product is exported.

The dossiers on tax exemption for corresponding raw materials and the consideration thereof shall be stipulated and handled by the customs office.

8.2- An enterprise selling its products to another enterprise that does not directly manufacture export goods shall not be eligible for tax exemption for the corresponding raw materials.

8.3- The value of products sold by an enterprise to others for use as materials for further manufacture of export goods shall not be accounted into its annual export value.

8.4- The plan for sale of such products shall be a part of the enterprise's overall plan for sale of its products in Vietnam which is annually approved by the Ministry of Trade or the agency authorized by the Ministry of Trade.

Article 9.- Regarding the processing activities

9.1- Enterprises shall be entitled to perform the processing or subcontracted processing of products in accordance with the objectives defined in their investment licenses, more concretely:

+ Conducting the processing for foreign parties

+ Conducting the processing for domestic parties

+ Subcontracting the domestic processing of part or several details of the product(s), which cannot be turned out by their machinery, equipment or technological lines.

9.2- A dossier to be sent to the Ministry of Trade or the agency(ies) authorized by the Ministry of Trade for registration of a processing contract shall include:

+ A written request of the concerned enterprise

+ A copy of the investment license or business license in case of a business cooperation contract

+ The processing contract and its appendices

+ The valid certificates of registered trade mark(s) and of goods origin

+ The norms of raw materials and materials consumption for one product unit and the written description of norm-calculating method, which shall serve as basis for the registry to inspect before, during and after the registration of the processing contract.

The time limit for processing contract registration is prescribed in Article 2.

9.3- The directors of the enterprises shall be responsible before law for the norms of raw material consumption and wastage in the processing.

Article 10.- The regime of periodical reporting

Once every three months, the enterprises shall send to the Ministry of Trade and the Ministry of Planning and Investment reports on the performance of their plans already approved by the Ministry of Trade; more concretely:

+ The import of machinery, equipment and/or supplies for capital construction;

+ The import of raw materials and materials in service of production and business;

+ The direct export, entrusted export and export entrustment;

+ The sale of products in Vietnam (separating the sale of products to other enterprises for use as materials for manufacture of export goods).

The performance reports must clearly state the names, quantities and values of goods.

+ The proposals (if any).

In case of necessity, enterprises shall make reports at the request of the Ministry of Trade or the agency(ies) authorized by the Ministry of Trade.

For the enterprises that fail to send periodical reports for two successive times, the Ministry of Trade shall refuse to approve their plans for subsequent import and/or sale of products.

Article 11.- Implementation provisions

The People's Committees of the provinces and cities directly under the Central Government, and the management boards of industrial parks that are authorized by the Ministry of Trade shall inform the foreign-invested enterprises of the content of this Regulation for implementation and at the same time report to the Ministry of Trade on matters arising in the course of implementation for timely and appropriate readjustment.

The officials and employees of the Ministry of Trade and the agencies authorized by the Ministry of Trade shall have to strictly implement this document. Any violations shall, depending on their seriousness, be examined for liabilities as prescribed by law.

For the Minister of Trade

Vice Minister

MAI VAN DAU

APPENDIX 1

THE LISTS OF GOODS ITEMS NOT MANUFACTURED BY THE ENTERPRISES UNDER THEIR INVESTMENT LICENSES AND BANNED FROM EXPORT IN 1998

LIST 1

GOODS BANNED FROM EXPORT IN 1998

(Issued together with Decision No.11/1998/QD-TTg of January 23, 1998 of the Prime Minister)

1. Weapons, ammunitions, explosives, military technical equipment.

2. Antiques.

3. Narcotics of all kinds.

4. Toxic chemicals.

5. Log, sawed timber, barked timber, firewood, charcoal made from wood or fire wood, forest wood products made from timber of Group IA and planks processed from timber of Group IIA on the list issued together with Decree No.18-HDBT of January 17, 1992; raw material rattan.

6. Wild animals, and animals and plants of rare and precious species.

LIST 2

EXPORT GOODS ITEMS MANAGED

BY 1998 QUOTAS

(Issued together with Decision No.11/1998/QD-TTg of January 23, 1998 of the Prime Minister)

- Rice.

- Textiles and garments exported to the EU, Canada, Norway and Turkey.

LIST 3

EXPORT GOODS SUBJECT TO THE SPECIFIC REGULATIONS

1. Explosives, inflammables (except for match).

2. Books and newspapers.

3. Pearls, gemstones, precious metals (except for fake jewelry).

4. Art works, collected items, antiques.

5. Wood products (except for handicraft and fine-art articles specified in Article 7).

6. Coffee.

7. Forest animals.

8. Forest plants for breeding.

9. Aquatic products.

10. Minerals.

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In cases where enterprises are granted investment licenses or business licenses to manufacture the above-listed goods items, the export thereof shall comply with the investment licenses and the relevant legal documents.-